[Letterhead of DMC Stratex Networks Inc.]<\/p>\n\n
February 26, 2002<\/p>\n\n
Mr. Jonathan Zakin
\nChairman and Chief Executive Officer
\nWestern Multiplex Corporation
\n1196 Borregas Avenue
\nSunnyvale, California 94089<\/p>\n\nDear Jonathan:<\/p>\n\n
DMC Stratex Networks, Inc. (\u0093DMC\u0094) has been observing closely the market\u0092s\nreaction to the surprising announcement of your intention to acquire Proxim,\nInc. (\u0093Proxim\u0094). We believe that the exceptionally steep price drop\nexperienced in your common stock following the announcement of your transaction\nwith Proxim reflects serious investor concerns with the proposed transaction.<\/p>\n\n
As you are aware, several months ago our respective management teams held\nextensive discussion in connection with a potential combination of our\ncompanies. Although we were not able to reach an agreement at that time on the\nterms of a combination, I believe both management teams viewed a combination of\nour businesses as strategically compelling.<\/p>\n\n
I am particularly disappointed that we were not informed that Western Multiplex\nCorporation (\u0093Western Multiplex\u0094) was considering an acquisition of Proxim and\nwere not provided the opportunity to continue our discussions prior to the\nannouncement of that proposed transaction. Nevertheless, we are prepared to\nproceed with a strategic business combination of Western Multiplex with DMC on\nterms that would provide far greater value for Western Multiplex\u0092s stockholders\nthan the pending transaction and therefore merits detailed and serious\nconsideration by you and your advisors.<\/p>\n\n
To that end, we propose to combine with Western Multiplex in a stock-for-stock\ntransaction that would be tax-free to Western Multiplex\u0092s stockholders. Our\nproposal would involve an exchange of shares at an exchange ratio of 0.5215 DMC\nshares per Western Multiplex share. Based on February 26, 2002 closing prices,\nour proposal represents a 37.9% premium over Western Multiplex\u0092s current market\nprice and a 60.6% premium based on our average share price over the last 30\ndays. This exchange ratio would remain constant and will result in Western\nMultiplex\u0092s stockholders owning approximately 28% of the combined company.<\/p>\n\n
We believe a transaction between Western Multiplex and DMC would provide\ndemonstrably superior short term and long term value to your stockholders by\ncombining two world-class leaders in the wireless infrastructure industry. I\nalso believe that the combination of our two companies represents a uniquely\nattractive opportunity to your management team and employees. We intend to\nhonor existing financial arrangements for you and your employees, including the\nacceleration of unvested options to acquire shares in Western Multiplex\u0092s\ncommon<\/p>\n\n\n
<\/p>
\n\n2<\/p>\n\n\n
stock, and look forward to exploring with you attractive opportunities\nfor your senior management in the combined organization.<\/p>\n\n
With a combined market capitalization of approximately $630 million, your\nstockholders will gain additional comfort from having a significantly enhanced\npath to liquidity compared to the transaction with Proxim. I also anticipate a\nBoard seat in the combined company would be given to an individual designated\nby Western Multiplex. Lastly, DMC has made meaningful acquisitions in the\npast, and we are intimately familiar with the regulatory process required to\nconsummate a transaction of this nature. We anticipate no significant issues\nor undue time delays.<\/p>\n\n
As we previously discussed, we believe that a combination of our companies is\ncompelling from a strategic perspective and creates a superior platform to\ncontinue strong growth. Our products, customers and channels are complementary.\nCombined, we will become one of the world\u0092s largest independent suppliers of\nwireless access products covering the licensed and unlicensed spectrum, and\nwill be ideally positioned to capture opportunities both in the current\ndownturn and the anticipated recovery later this year and beyond. We would\nlike to highlight five areas of substantial benefits from our proposed\ntransaction:<\/p>\n\n
\n<\/p><\/pre>\n
<\/bbr><\/li>\n <\/bbr><\/li>\n <\/bbr><\/li>\n <\/bbr><\/li>\n<\/ul>\n 3<\/p>\n We believe that our proposal is substantially more attractive to your Given the extensive prior discussions and diligence review performed by our We believe that time is of the essence and are prepared to move forward The Board of DMC has unanimously approved this proposal and has unanimously Sincerely,<\/p>\n \/s\/ Charles D. Kissner<\/p>\n Charles D. Kissner<\/p>\n cc: Members of the Board of Directors of Western Multiplex<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7334,9318],"corporate_contracts_industries":[9516],"corporate_contracts_types":[9622,9626],"class_list":["post-43476","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-dmc-stratex-networks-inc","corporate_contracts_companies-western-multiplex-corp","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43476"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43476"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43476"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nleaders in our respective licensed and unlicensed product space and
\ncombined we will have a unique opportunity to offer one-stop
\nshopping to our customers and a credible upgrade path.<\/p>\n
\nThe combination will create a much larger entity with diversified
\nproducts and customer base. This is critical to success in the
\nfuture with anticipated consolidation in our industry, among both
\nsuppliers and customers.<\/p>\n
\nmicrowave and networking technologies will substantially enhance our
\ncapability to offer higher functionality products at much lower cost
\npoints, providing more value to our customers. Our geographic
\nproximity, complementary engineering and management talent, and
\nsynergistic operations provide an impetus for a successful merger.<\/p>\n
\ncapabilities<\/b>. We believe that industry conditions are inevitably
\ndriving substantial integration of supplier capabilities, and that
\nfuture success will require more complete total solutions. This
\nproposed merger greatly enhances our mutual ability to accomplish
\nthis with the speed that the marketplace demands.\n<\/li>\n
\n
\nstockholders than your pending transaction. We believe that your stockholders
\nwill enthusiastically embrace our proposal once they learn of it. In light of
\nthe fiduciary duties of the directors of Western Multiplex to its stockholders,
\nwe believe that your Board of Directors has a legal duty to facilitate the
\nreceipt by its stockholders of our proposal in order that they may freely
\nchoose what we believe is a much more favorable transaction. Our proposal
\nprovides Western Multiplex\u0092s stockholders with an immediate and significant
\nincrease in economic value and a compelling long term opportunity to
\nparticipate as a stockholder in a leading supplier to the wireless industry.<\/p>\n
\nrespective companies, our diligence requirements would be adjusted accordingly.
\nWe propose that (i) you provide us with copies of the same non-public
\ninformation concerning Western Multiplex that was furnished to Proxim,
\nincluding the Disclosure Letter to the agreement with Proxim and background
\ninformation related to such disclosures, (ii) confirm that the Disclosure
\nLetter remains accurate, and (iii) provide us the opportunity to perform
\nconfirmatory bring-down business due diligence and accounting and legal due
\ndiligence. In order to expedite the process, we have already prepared our
\nDisclosure Letter to the Western Multiplex\/Proxim agreement representations and
\nwarranties and are prepared to deliver that to you concurrently with your
\ndelivery of your Disclosure Letter.<\/p>\n
\nexpeditiously by committing all necessary resources to promptly complete a
\ntransaction. In that regard, we have engaged CIBC World Markets and Morrison &
\nFoerster LLP to advise us in this transaction. We are prepared immediately to
\nenter into a confidentiality agreement, to perform our limited due diligence
\nrequirements described above, to enter into a merger agreement with you on the
\nsame terms as your agreement with Proxim (with the exception of certain
\nprovisions of Section 4.1 of such agreement), and to consummate the combination
\nof our companies on generally the same time line as your proposed merger with
\nProxim.<\/p>\n
\nauthorized us to proceed. We look forward to meeting with you as soon as
\npossible to discuss and negotiate our proposal in detail and to achieve prompt
\nagreement. You can be assured that we will do everything in our power to see
\nthis transaction through to successful completion. We strongly prefer to
\nconsummate this transaction on a mutually satisfactory, negotiated basis.
\nAccordingly, we do not plan to disclose our proposal publicly at this time. We
\nare prepared to meet immediately with you and your Board.<\/p>\n